Businesses: Picking up the pieces

May 24, 2013 2:51 PM

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The first hours and days after a devastating storm are crucial for any small business. They could mean the difference between staying in business or going under.

That concern helped create the Florida Small Business Emergency Bridge Loan program. It has provided many local businesses with the financial backing to rebound from costly hurricane damage. The program is offered as a resource to provide short-term loans to businesses affected by the storm.

The governor determines if the program is needed after a storm. In the past, the economic development arms of the chambers of commerce in Escambia and Santa Rosa counties helped administer the loans.

If a storm damages your business, contact the chamber of commerce to see if the program will be available.

BASIC INFORMATION ABOUT THE LOAN PROGRAM

Q: What is the purpose of a Small Business Emergency Bridge Loan?

A: The state’s emergency bridge loan program is a short-term loan program for small businesses experiencing difficulty surviving or restarting as a result of a hurricane’s physical impact on the business. It is designed as a short-term loan for businesses with fewer than 100 employees and provides up to $25,000. The program is designed to provide a source of expedient cash flow to businesses affected by a major catastrophe, enabling them to quickly begin repairs, replace inventory, etc. Eligible applicants generally are small businesses that have sustained significant physical damage and have been in business for at least one year. The short-term loans are intended to bridge the gap between the time a major catastrophe hits and when a business has secured other resources to resume to relative normalcy.

Q: What are the terms of a Small Business Emergency Bridge Loan?

A: In the past, these interest-free loans have been available for a minimum of $1,000 and a maximum of $25,000, in terms of 90-day or 180-day maturities. The exact amount available to each business is determined on a case-by-case basis after a major catastrophe.

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Q: Who is eligible to apply for emergency bridge loans?

A: Those eligible to apply include small businesses established in Escambia, Santa Rosa, Walton, Okaloosa and Bay counties prior to a storm or other disaster. The specific date a business must be established by will be determined by the state.

Minimum number of employees: Two. (Self-employed individuals may be eligible on a case-by-case basis.)

Maximum size of the business: 100 employees.

Need for the loan and use of proceeds must be directly related to the physical impact of the storm. Applicants must have verifiable, physical damage.

Q: Is there an ownership requirement for loan eligibility?

A: Loans are made to individuals who are at least 50 percent owners of the business. Only one loan per individual or per business is available.

Q: Are there restrictions on the use of such loans?

A: The borrower is required to sign agreements that proceeds of this loan will be used only for purposes of maintaining or restarting the business in the designated area and loans will be repaid from insurance proceeds or proceeds of other financing obtained in connection with the effects of the storm.

Bridge loans cannot be used for economic injury, decreased sales or service from temporary closure, power outage, evacuations, limited stock, etc

Q: Is there a deadline to apply?

A: Applications deadlines are established when the governor activates the loan program. If emergency bridge loans are approved after a storm, the Small Business Development Center is a resource for help on loans. Contact the SBDC at 473-7830.